UK residential developer and urban regeneration specialist Sigma Capital Group said Friday that it has agreed to be bought by a subsidiary of investment funds managed by PineBridge Benson Elliot for £188.4 mln (€220 mln) in cash.
Sigma’s board and the bidders have agreed on the terms of conditions of an offer of 202.1 pence a share, which represents a 36% premium to Sigma's closing price on Thursday and a 45% premium to the average price for the past six months.
After launching a review of strategic options in late 2020, Sigma appointed Rothschild & Co to run a private sale process. Sigma said its independent directors believe that the offer from PineBridge, a European real-estate private-equity specialist, represents the most attractive option for its shareholders. Discussions with all other interested parties have terminated, Sigma said.
PineBridge said that it aims to build on ‘Sigma’s solid foundation’, and intends ‘to continue to grow the business by providing capital backing, investment, strategic support and expertise in Sigma's target geographic markets’. ‘Sigma operates in an important part of the market that has shown remarkable resilience over the past year and, in partnership, we can further build on the successful U.K. housing platform the Sigma team have established,’ commented PineBridge’s managing partner Joseph De Leo.
Sigma said the deal remains subject to approval of independent shareholders. The company said it has received irrevocable undertakings and letters of intent to back the deal in respect of shares representing 61% of its existing issued share capital.
The deal is expected to be completed during the third quarter of the year.
Commenting on the acquisition, Sigma's founder and CEO Graham Barnet said: ‘We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties. We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot's capital backing, will make a powerful combination, and enable Sigma to expand its activities significantly.’
David Sigsworth, the senior independent non-executive director of Sigma, said: ‘Following a competitive sale process initiated by the Company in line with its strategic growth plans, which attracted strong interest from multiple well-funded parties, the Independent Sigma Directors believe the cash offer of 202.1 pence per share from Bidco is highly attractive and in the interests of all Sigma Shareholders. The offer presents an opportunity for Sigma Shareholders to crystallise a meaningful premium today to various share price based metrics and the Independent Sigma Directors intend to recommend the offer unanimously. The Independent Sigma Directors believe Bidco and PineBridge Benson Elliot can provide Sigma with the platform required to capitalise on the significant market opportunity in the UK residential real estate sector.’
PineBridge Benson Elliot is a pan-European real estate private equity specialist with $3.2 bn of managed equity. The firm holds a diversified real estate portfolio, currently comprised of office, retail, hotel and residential assets in the UK, France, Germany, Italy, Spain, Belgium and Central Europe.
Founded in 2005 as Benson Elliot Capital Management LLP, Benson Elliot was acquired in December 2020 by PineBridge Investments, a private, global asset manager with $133.0 bn in assets under management.
